Pakistan’s Nishat Group to Start Milk Production This Year

Nishat Group, owner of Pakistan’s
largest lender by market value, plans to enter the consumer
goods business by starting milk production this year, Chief
Financial Officer Inayat Ullah Niazi said.

“We have bought land outside Lahore and after beginning
milk production, we will add other products to the line,” Niazi
said by telephone from Lahore today. He didn’t provide more
details.

Niazi said the group, which owns MCB Bank Ltd. (MCB) and Nishat
Mills Ltd. (NML), the nation’s largest textiles exporter, sees growth
potential in Pakistan for consumer goods, particularly food
products. The government plans to spend 3.5 billion rupees ($40
million) to improve the dairy industry, including expanding
infrastructure, in the fiscal year ending June 30, and boost
economic growth in the period to 4.2 percent from 2.4 percent.

“Dairy is one of the fastest growing businesses in
Pakistan,” said Abdul Aziz Anis, who oversees $35 million in
assets including shares of MCB and Nishat Mills, as chief
executive officer of Karachi-based Alfalah GHP Investment
Management Ltd. “There is huge growth potential in the consumer
business, but the only question is the buying power of the
population with still-high inflation.”

Nishat Group joins Nestle SA in expanding in dairy in
Pakistan. The Vevey, Switzerland-based company said in August
that it plans to double dairy output in Pakistan by spending 300
million Swiss francs ($334 million) in the next three to four
years. Companies including Unilever and Colgate-Palmolive Co.
are also expanding sales of consumer goods in the South Asian
nation as demand for products such as Sunsilk shampoo and
Colgate toothpaste bolster local units’ revenue.

Inflation in Pakistan rose 11.56 percent in August from a
year earlier, the fastest pace in the Asia-Pacific region after
Vietnam, according to data compiled by Bloomberg. The State Bank
of Pakistan cut the discount rate to 12 percent from 13.5
percent this month to help spur investment in the nation, which
has been hit by flooding and terrorism.